- Danis Latypov

As American businesses look to expand into Eurasian markets, the opportunities can be substantial—but so are the risks. Countries across the former Soviet Union offer access to natural resources, industrial capacity, and emerging consumer bases. Yet, despite formal legal frameworks that often mirror Western standards, the actual enforcement of those laws can vary dramatically. In my two decades as a prosecutor in Russia, I witnessed how legal systems can be used both to protect and to pressure. This guide offers practical insights for U.S. business leaders to navigate these environments with greater confidence and security.

Understand Prosecutorial Leverage

In many post-Soviet jurisdictions, prosecutors wield significant discretionary power. While the formal role resembles that of district attorneys in the U.S., their authority to initiate criminal proceedings or audits often extends into areas of commercial conflict. Prosecutorial actions may be triggered not by law violations, but by political motivations, local rivalries, or financial incentives. American companies entering these markets must recognize that legal exposure may arise not from wrongdoing, but from being on the wrong side of a local dispute.

Start with Deep Due Diligence

Before signing contracts or entering partnerships, conduct thorough due diligence—not just on the financials, but on political affiliations, enforcement history, and regional dynamics. Is your partner connected to local power structures? Are there signs of unresolved disputes or prior state interference? Legal research alone is not enough; you need human intelligence, local expertise, and a risk-mapping approach that anticipates pressure points.

Contract Structure Matters

Strong contracts are essential, but they must be enforceable in practice, not just in theory. Clauses that allow for arbitration in neutral jurisdictions, clear termination procedures, and multi-jurisdictional enforceability are critical. Avoid overreliance on local courts if your counterpart is politically protected or well-connected. In many cases, it may be prudent to use offshore structures or third-country governing law provisions.

Regulatory Compliance and Reporting

One area often overlooked is proactive compliance. In post-Soviet states, regulatory audits are frequently used as tools of leverage. Ensure that your internal operations are transparent, well-documented, and ready to withstand scrutiny. This includes tax filings, employment records, environmental compliance, and import/export documentation. Proactive transparency can prevent escalation and provide a defensive shield if targeted by authorities.

Monitor Political Signals

Successful companies in these markets understand that law and politics are intertwined. Keep close watch on regional developments: changes in governors, upcoming elections, or shifting alliances can influence enforcement priorities. In some cases, being associated with a political rival can result in intensified legal attention. A geopolitical lens should inform both investment and exit decisions.

Have a Legal Response Strategy

What happens if your company is suddenly audited, fined, or subjected to criminal inquiry? Most U.S. companies are unprepared for this. Have a response plan in place: identify reputable local counsel, secure translation support, and ensure that your U.S.-based legal team understands the local legal and cultural context. Time is often critical. Delay can be interpreted as noncompliance.

Use Local Advisors Who Understand Informal Dynamics

Legal systems in many post-Soviet states operate on dual tracks—the official law and the unofficial norms. Choose local partners and advisors who understand both. This doesn’t mean engaging in unethical behavior. It means working with professionals who know how to navigate complex institutions, assess unwritten rules, and help you avoid inadvertent mistakes that could trigger legal risk.

Case Study: Administrative Leverage Against a Foreign JV

In one case I supervised, a joint venture between a Russian entity and a European logistics company was accused of violating land-use laws. The allegations were unfounded but used to delay expansion and push the foreign partner to exit. The issue was resolved only after we launched an internal review and recognized the administrative pressure was retaliatory. Such incidents are not rare—and underscore why proactive legal planning is essential.

Conclusion

Doing business in Russia and other post-Soviet states is not inherently unsafe, but it is fundamentally different. Success depends not only on strategy and capital, but on understanding the legal and political terrain. My consulting work is dedicated to helping American companies mitigate risk, anticipate prosecutorial and regulatory challenges, and operate with integrity in high-stakes environments. With informed planning and experienced guidance, U.S. businesses can protect their interests while contributing to lawful and transparent international commerce.